Bulls have managed to push prices up from 1560 more than 100 points to new all time highs (daily close). We were bullish all the way up but now it is time to exit and prefer cash than being long. So what if prices manage to get to 1700 or 1705? The possibility of an at least 20 point decline towards 1660 has increased and is even possible to see 1630-40 area in a fast corrective downward wave.
Even if we assume that the longer term trend will continue to be bullish, a short term pull back down is very possible and very near. If 1671 is not broken, then I expect a final upward thrust to 1700. Breaking below that level will push prices to the 38% Fibonacci retracement at 1654.
If support fails, we could very well be in the alternative red scenario where the entire move from 1560 is over and we are heading towards 1636. Don’t forget that for 2013 prices are up 20% already and the formation from last October is reaching its extension limits. There is high probability of a bigger degree correction downwards. Prices will no matter what make even a small downward correction where we will find the opportunity to re-enter closer to our stops.
Concluding, the rise in SPX is nearly or already over. For multiple time frames the entire move could end around 1700 and is not necessary to see that number. We are neutral from today and will consider bearish positions if signs of weakness appear. More updates, trades and analysis for subscribers.
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